Max to invest Rs 2,500 cr in Lucknow, be UP's 'largest' pvt healthcare firm

Delhi-based group plans to double overall capacity by adding 4,200 beds in four to five years

Max Healthcare Institute has said its plans to invest Rs 2500 crore for developing hospitals in Lucknow where it earlier acquired the 550-bed Sahara Hospital for Rs 940 crore, aiming to become “largest private sector player” in Uttar Pradesh in its field.

The new investment will be part of the Delhi-based group’s plan to double capacity by adding 4,200 beds in the next four to five years for an investment of more than Rs 5,000 crore. The group has 4,000 beds now and in five years the count will be 8,200.

Sahara Hospital, which is spread over a 27-acre land in Gomti Nagar in the heart of Lucknow, has 285 operational beds. Max Healthcare acquired it on a slump sale basis from Sahara India Medical Institute Limited. This acquisition marked the beginning of Max Healthcare’s plans to scale up its presence and investments in the region. The hospital has been renamed as Max Super Specialty Hospital.

Speaking to ‘Business Standard’ on Monday, Abhay Soi, chairman and managing director of Max Healthcare, said the group plans to invest Rs 2,500 crore to upgrade the Gomti Nagar hospital and set up a new 500-bed hospital on a 5.6-acre land in Shaheed Path in Lucknow.

Of that amount, Rs 150-200 crore will be invested to upgrade the Gomti Nagar hospital’s medical facilities, add 265 more beds and renovate civil infrastructure.

For the hospital in Shaheed Path, Max acquired the land through e-auction for Rs 167 crore. “We are scheduled to emerge as the largest private sector hospital players in Uttar Pradesh, let alone Lucknow, with these investments,” Soi said. Max will have more than 2,000 hospital beds in Uttar Pradesh, treating 1.5 million people.

The group is “excited” about its entry in Lucknow by acquiring Sahara Hospital. “This gives us an opportunity to participate in the development of Uttar Pradesh as it marches towards becoming a $1 trillion economy by 2027. Through our investments, we shall be providing employment opportunities for over 10,000 people in the state,” said Soi.

For its plan to double bed count, Max Healthcare has invested nearly Rs 2000 crore in the last two years (including the Lucknow Sahara Hospital. Many new beds have come up adjacent to existing hospitals where we have run out of capacity, Soi said. “I have run out of capacity everywhere except in Saket,” he said, referring to the company’s hospital in South Delhi.

Max is adding around 329 beds in Nanavati Hospital in Mumbai, 190 beds in Mohali in Punjab and 300 beds in Dwarka (Delhi). In Saket, the group is adding another 650 beds.

Soi said that adding new beds to existing facilities gives the company operating leverage in terms of medical staff and captive footfall. So, on day-one theoretically such expanded facilities should be positive in terms of ebitda (earnings before interest, taxes, depreciation and amortisation). Soi said. “We have seen this in Shalimar Bagh (Delhi) and other such brownfield expansions. In the first month itself the incremental beds had an occupancy of 80 percent,” he adds.

Max recently acquired the 200-bed Alexis Hospital in Nagpur as part of itsWestern India strategy. “Besides Mumbai, we always wanted to do Pune and Nagpur because these are the two other large cities. In Mumbai also we are hoping to do more, but it gets difficult to get land.”

Current No. of Operational Beds	4000 beds
Planned Bed Expansion	4,200 beds in 4-5 years
Investment for planned bed expansion	over Rs 5,000 crore
No. of operational beds at Sahara Hospital, Lucknow	285 beds
Expansion at Sahara Hospital, Lucknow	265 beds in next 2 years
No. of beds at Shaheed Path land	500 beds
Source: Company